No fee on UPI transactions, Finance Ministry calls rumors misleading
12 Jun 2025

India's Ministry of Finance has dismissed rumors of the Merchant Discount Rate (MDR) being imposed on Unified Payments Interface (UPI) transactions.

The ministry termed these claims as "false, baseless, and misleading," adding that they create unnecessary confusion and fear among the public.

This clarification comes after several reports on social media suggested that the government was planning to impose an MDR on high-value UPI transactions.

What is Merchant Discount Rate (MDR)?
MDR explained

Merchant Discount Rate (MDR) is a fee that banks charge merchants for processing real-time payments.

Earlier, merchants paid an MDR of 1% on card payments. In 2020, the government waived these charges on debit cards to promote digital transactions across the country.

However, MDR still applies to most credit card transactions at rates ranging from 1% to 3%, depending on factors like card type, transaction size, and merchant category.

UPI processed over 18.68 billion transactions in May
UPI growth

UPI, managed by the National Payments Corporation of India (NPCI), has become the most popular payment transaction platform in the country.

In May alone, it processed a record 18.68 billion transactions worth ₹25.14 lakh crore.

This is an increase from April's ₹23.95 lakh crore worth of transactions and shows a year-on-year (YoY) growth of 33% over last year's figures for the same month (14.03 billion transactions).